1986 PLP 1599 (CLC)

Zaheeruddin Khan for Respondent No.

2. Date of hearing: 1st April, 1986. This appeal under section 96 of the Code of Civil Procedure is filed by the appellant/ defendant against the judgment and decree passed by the First Civil Judge, First Class, Karachi, in Suit No. 509/1972, decreeing the suit of plaintiff /respondent No.1 against the appellant in the sum of Rs.25,957 and costs and interest at the rate of nine per cent from the date of the decree till the amount is paid. The following facts may be stated, which are not in dispute. Messrs Dada Steel Mills imported a consignment of pig iron for foundry, weighing 1014 metric tons equivalent to 997.992 long tons from Japan. The above consignment was insured by Messrs Dada Steel Mills with the plaintiff in the sum of Rs.10,50,000 under a marine insurance policy, bearing No. M‑71/147091, dated 26‑7‑1971. The consignment was shipped on vessel s . s M . V . Ravi, which arrived at the Karachi Port on, or, about 14‑9‑1971. The consignment was discharged by, or about 27‑9‑1971 in the custody of respondent No.2. It is an admitted position that the consignment was shipped in bulk, and, at the time of delivery of the consignment by the appellant to respondent No.2, it was mentioned that it was subject to delivery. It is also an admitted position that the consignment was delivered in piecemeal by respondent No.2 to the consignees, Messrs Dada Steel Mills, and it is the case of respondent No.2 that, upon delivery of the consignment to the consignees, it was found that it was short landed by a quantity of 24 tons 12 cwts and 2 qrs. The consignees, Messrs Dada Steel Mills, upon taking the delivery of the consignment, lodged a claim with respondent No.1 in respect of the short landed quantity of the pig iron, and it is alleged that the claim was settled by respondent No. 1 in the sum of Rs.25,

957. The respondent No. 1, after having obtained a letter of subrogation from the consignees, Messrs Dada Steel Mills, served a notice, alongwith the claim memo., on the appellants, and upon their failure to reimburse them with the amount of claim allegedly paid by respondent No. 1 to the consignees, instituted Suit No. 509/1972 for the recovery of an amount of Rs.25,957 on the basis of the letter of subrogation executed by the consignees in favour of respondent No.1. The claim in the suit was resisted both by the appellants and respondent. No.2 and on the basis of the pleadings of the parties, the Court settled issues on 17th April, 1974, which were, later on, amended on 16‑8‑1976. The amended issues in the suit are as follows:‑ "(1) What was the weight of the consignment at the time of shipment and who had ascertained the said weight and whether the weight declared by the shippers in the bill of lading is binding upon the defendants? (2) Whether the consignment in suit delivered short from the ship? If so to what extent? (3) Whether the plaintiff is entitled to sue the defendant? (4) Did defendant No. 2 act as bailee/agent of defendant No. 1? If so, what is its effect? (5) Whether the suit is not maintainable under section 87 of the K.P.T. Act and also in view of the provisions of Bye‑laws No.46 of the K.P.T. Manual Part III against the defendant No.2? (6) Was any part of the suit consignment short landed from the vessel and if so, what was the quantity shortlanded and whether the defendant No.1 are liable for the same? (7) To what relief the plaintiff is entitled against the defendants?" On the above issues, the plaintiff /respondent No.l examined one of the representatives of the consignees Mirza Iftikhar Ali Baig (Exh.5) and through him produced the documents, which are Exh.5 to Exh.17. The plaintiffs also examined one of its employees, Yousuf Ali, as Exh.18, and produced through him documents, Exhs. 19 to

27. They also examined an Officer from Habib Bank Limited, Cloth Market Branch, Karachi, Abdul Khaliq (Exh. 28). The appellants, in support of their cases, examined one of their employees Akhtar Ali as Exh.29, and through him produced documents Exh.30 to Exh.32. The respondent No.2 examined one of their employees, Faqir Muhammad (Exh.33) and produced through him documents, which are Exhs. 34 to

36. On Issue No. 1, the learned trial Court reached the conclusion that the consignment of pig iron shipped on ship "M. V . Ravi" weighed 1014 metric tons equivalent to 997.992 long tons. On issues 2, 3 and 6, which were dealt with together, the trial Court reached the conclusion that a quantity of 24 tons 12 cwts. and 2 qrs. was short‑landed at the Karachi Port when the cargo was discharged in the custody of defendant No.2 by the appellants, and the appellants were accordingly hold responsible for the short‑landing. Issue No. 5 was not contested before the Court, and, on Issue No. 7, the trial Court held that the plaintiff was entitled to a decree in the sum of Rs.25,957, which was worked out on the basis of the import value of the consignment plus the cost of bonus vouchers alleged to have been surrendered by the consignees for the purposes of the issuance of the import licence. Against the judgment and decree, the appellant, who was defendant No. 1 in the suit, alone had preferred the appeal, and no appeal has been preferred by defendant No.2, against whom the suit was dismissed. I have heard the learned counsel for the appellants and the learned counsel for the respondents at length, and, after hearing them, I am of the view that the judgment and decree of the Courts below needed modification only to the extent of the amount, which was decreed by the trial Court in favour of respondent No.1/plaintiff. On Issue No.1, the learned trial Court reached the conclusion on the basis of the entries existing in the bill of lading that the total weight of the consignment shipped by "M . V . Ravi" was 997.992 long tons. The learned counsel for the appellants contends that the entries in the bill of lading with regard to weight of consignment were not binding on the appellant, as the declaration with regard to the weight of the consignment was made in the bill of lading on the basis of declaration and verification of either the shippers or a third party. Alternatively, it is contended that admittedly the consignment was shipped in bulk and, as such, certain amount of wastage was permissible, and, since the total short‑landed quantity claimed in the suit was a little above two per cent of the total weight of the consignment, it should be presumed that much quantity would be covered by the provision of wastage permissible in respect of the consignments, which are shipped in bulk. In support of the weight of the consignment, two documents were produced before the trial Court, namely, the invoice (Exh.6) and the bill of lading (Exh.7). In both these documents, the weight of the consignment shown is the same. It is true that, in the Carriage of Goods by Sea Act, 1924, as applicable in United Kingdom, a provision exists, which provides that, in the case of a consignment, shipped in bulk, certain amount of wastage is allowable, but neither any rule has been cited nor evidence of any custom or usage has been produced in the case to show the extent of such allowance. It is conceded that. there is no statutory rule, or, provision governing allowance of such wastage in respect of the consignments shipped in bulk, and therefore, in the absence of any evidence to establish the extent of allowance of wastage in such consignments, it could not be held that the short‑landed quantity of the consignment was covered under the allowance allowed in respect of consignments shipped in bulk quantity. Similarly, with regard to the entries in the bill of lading with regard to weight of the consignment, the learned counsel contended that, as the entries were based on the basis of weight disclosed by the shippers, these entries were not binding on the carriers, and therefore, it was incumbent on the plaintiff to have produced the original weighment certificate to prove the weight of consignment. The provisions contained in the Carriage of Goods by Sea Act, 1925, which is applicable to Pakistan, as well as the corresponding provision in the English Act are identical. In Act XXV of 1925, which is applicable to Pakistan, the relevant provision is contained in Article 3, which deals with the responsibilities and liabilities of the carriers, and the relevant rule is

4. The same article and rule is also in the English Act. Under Rule 4 of the Article 3 of the Carriage of Goods by Sea Act, a bill of lading is the prima facie evidence of receipt by the carriers of the goods as therein described in accordance with para. 3(a), (b) and (c). It is not the case of, the appellants that the entries with regard to the weight of the consignment mentioned in the bill of lading were fraudulent, or, that the carrier had no means, at the time of issuance of the bill of lading, to verify the weight of the consignment as disclosed by the shippers. In any case, as, under the relevant articles, the entries in the bill of lading are to be taken as the prima facie evidence of the nature of the consignment, and its description as mentioned in the bill of lading the burden to prove that the entries made in the bill of lading were not in accordance with the actual weight and condition of the consignment rested on the appellants. It is not disputed by the learned counsel for the appellants that no evidence in rebuttal to the entries appearing in the bill of lading was produced by the appellants in the case, and, in the absence of that, the learned trial Court rightly relied on the entries with regard to weight of the consignment as mentioned in the bill of lading. The second contention of the learned counsel for the appellants is that the respondent No. 1 failed to prove a valid subrogation in their favour for the purposes of maintaining the suit. It is contended by the learned counsel that, in order to maintain a suit on the basis of the right of subrogation, actual payment must be proved. The learned trial Court, on the basis of the lost voucher (Exh. 16) and the evidence of the representative of the consignees, coupled with the evidence of the representative of respondent No.1, reached the conclusion that the letter of subrogation executed by the consignees in favour of respondent No.1 was for consideration. The learned counsel for the appellants contends that it was admitted by the representative of the consignees that the letter of subrogation and the lost vouchers (Exhs. 17 and 16 respectively) were executed by the consignees before the actual payment. I have gone through the cross‑examination of Mirza Akhtar Ali Baig (Exh.5), who was examined as a representative of the consignees, and, after going through the same, I find that there was no suggestion to the witness to the effect that no payment at all was made by the respondent No. 1 in respect of the claim of the consignees. The representative of the consignees, in his examination‑in‑chief, categorically stated that the, claim of the consignees was settled by the plaintiff /respondent No.1, and that the payment was made to them by the plaintiff. No doubt, in the cross‑examination, the witness did say that they acknowledged the payment through the cheque, which bare a revenue stamp, and, on which the consignee had signed in token of having received the amount, but the mere fact that the cheque was not produced in evidence could not lead to the conclusion that no payment at all was made to the consignee by the plaintiff /respondent No.1. There was documentary evidence in the form of lost vouchers, coupled with the letter of subrogation signed by the consignee, which lends support to the oral evidence produced in this behalf that the letter of subrogation was for valuable consideration. I, therefore, do not agree with the learned counsel for the appellants that there was no valid subrogation in favour of the plaintiffs, so as to enable them to maintain the suit. The last contention of the learned counsel for the appellant relates to the value of the consignment and the proportionate loss' awarded by the trial Court. The contention of the learned counsel for the appellant is that the value of the consignment as disclosed in the invoice, letter of credit and in the bill of exchange was L.29,540.56, and, if this amount is divided by the total quantity of the pig iron, then the lost quantity of 24 tons 12 cwts. and 2 qrs. would work out to only Rs.8,

504. It is further contended by the learned counsel for the appellant that there was no justification for the learned trial Court to have, in any case, decreed the suit of the respondent No.1/plaintiff in excess of the aforesaid amount, as there was no evidence to support the claim that the import licence alleged to have been issued to the consignee was after surrender of bonus vouchers of equivalent value. It is also contended that, in the evidence of the consignees' representative, it was nowhere disclosed as to what amount was paid by the consignee towards the alleged purchase of bonus vouchers, and, in the absence of that, there was no justification for the trial Court to have worked out the value of the lost consignment after adding the alleged amount of bonus vouchers, which the plaintiff claimed to have incurred on the purchase of bonus vouchers. The contention of the learned counsel for the appellant does not appear to be without force. In support of the value of the consignment, the plaintiff has produced documents, which are Exhs. 6, 8 and

10. Exh.6 is the invoice issued by the supplier in respect of the quantity of pig iron shipped to the consignee. The value of the consignment in this document is shown as .19,540.56. Similarly, in Exh.8, which is a letter of credit established by the consignee in favour of the supplier, the same amount is shown. In the bill of exchange, which is Exh.10, again the value of the consignment as shown is the same, which is disclosed in Exhs.61 and

8. In these circumstances, a heavy burden lay on the respondent No.1/plaintiff to establish that, in addition to the value of the consignment shown in the aforesaid documents, the plaintiff was also entitled to recover an additional amount, which the consignee allegedly spent on the purchase of bonus vouchers for the purposes of obtaining the import licence. The only evidence on record relied by the learned counsel for the respondent No. 1, in support of the claim of the plaintiff that the consignee had purchased bonus vouchers of the equivalent value is Exh.9. This document was produced by the representative of the consignee, Mirza Iftikhar Ali Baig (Exh.5) during his evidence. An Officer of Habib Bank Ltd., Cloth Market Branch, Karachi was summoned to prove this document, alongwith the other document, which were produced in evidence by Mirza Iftikhar Ali Baig (Exh.5). The Officer, who was produced from Habib Bank Ltd., Cloth Market Branch, Karachi in his examination‑in‑chief only stated that the consignment was imported on bonus voucher, and he referred to document (Exh.5). In cross‑examination, this witness clearly admitted that he could not identify the signature on Exh.9 which was issued by the Kharadar Branch of Habib Bank Ltd., where the consignee maintained an account. The document (Exh.9) itself recites that the bonus vouchers were allegedly shown to have been purchased on the basis of two other documents, which are mentioned therein. The supporting evidence of the contents of Exh.9 was never produced before the Court. Even the person, who signed the document, was not summoned to prove the contents of the certificate. In these circumstances, the document (Exh.9) has no evidentiary value. Apart from the document (Exh.9), there was no other evidence available on the record to show that the consignee had incurred any expenses for the purposes of purchase of bonus vouchers and, in fact, no such averment is made even by any of the witnesses of the plaintiff that any amount was spent by the consignee on the purchase of bonus vouchers. In the absence of this evidence, the learned trial Court should have calculated the value of the lost consignment on the basis of the actual valuation shown in the documents (Exhs. 6, 8 and 10) plus any amount of customs duty, sales tax, etc. paid by the consignee at the time of the clearance of the consignment. On record, the plaintiff has produced the bill of entry in respect of the consignment, which shows the value of the consignment as Rs.3,46,

293. The import duty on the consignment is worked out at Rs.34,629.30, and the total value of the consignment for the purposes of payment of sales tax is shown in the bill of entry for consumption as Rs.3,80,922.30. On this amount, a total sum of Rs.28,569 was paid by the consignee as the sales tax. The grand total of all these amounts comes to Rs.4,09,491.30. The above amount was the total value of the consignment after payment of customs duty, sales tax, etc., and therefore, if this amount is taken as the net value of the consignment, the value of the lost consignment works out to Rs.10,

257. This amount has been worked out by the learned counsel for the parties jointly in Court. I accordingly modify the decree of the trial Court to the extent that the total amount payable to the plaintiff against the short‑landed quantity of pig iron will be Rs.10,257, which the appellant is liable to pay to respondent No.l/plaintiff. The plaintiff will also be entitled too the proportionate costs on the above amount and interest at the rate o If nine per cent from the date of institution of the suit till the amount is, paid. A . A Appeal partly accepted.